July 21, 2011

DairyAmerica joins Fonterra online dairy auction

DairyAmerica, a marketing company for four US dairy cooperatives, will begin selling milk products through Fonterra's GlobalDairyTrade (GDT) platform in October, as the auction site opens to outside participants.

Starting on October 4, DairyAmerica will offer skim milk powder through the platform with the intention of adding more products over time, GDT said in a statement.

More outside suppliers may follow, as Fonterra has held talks with Europe's Arla Foods and FrieslandCampina, and Australia's Murray Goulburn. GDT, which began in 2008, published market rules last week.

DairyAmerica's producers account for about 45% of the non-fat and skim milk powder produced in the US, and exports about 176,000 tonnes of products a year.

Some 650,000 tonnes of Fonterra dairy products trade on the GDT site each year.

"Looking forward, the company would be managing a significant proportion of its export business through GlobalDairyTrade, rather than through distributor and reseller arrangements," DairyAmerica chief executive Rich Lewis said.

Fonterra expanded its own range of products sold via GDT this year to include milk protein concentrate (MPC), rennet casein and cheese from July 19.

It also sells anhydrous milk fat, butter milk powder, skim and whole milk powder.

Adding more sellers would lift volume and result in "more reliable price discovery," Gary Romano, managing director of Fonterra Trade & Operations, said earlier this year.